Ann: DTL FY18 Interim Results Briefing, page-4

Since you've been a holder of this stock for over a decade, your thoughts old boy to today's announcements.

@danielpotter1972 ,

Due to the acute seasonality in DTL's earnings (second-half earnings typically constitute two-thirds of earnings), most of the time I tend to pay little heed to DTL's first-half results.

And this year the first-half result is even less relevant given the quantum of billable work that has slipped into the second-half.

So I think the only way to evaluate how DTL is performing over time is on an annual basis.

And on that score the company has grown its earnings by the following amounts since the major transformation exercise undertaken during FY2013 and FY2014:

Growth in Pre-Tax Earnings
FY2015: 40%
FY2016: 21%
FY2017: 22%
FY2018: >0% (guidance)

So, while a flat profit outcome this year on the previous year might not sound that flash at first glance, it warrants remembering that the FY2017 earnings base off which the company is now cycling is elevated, being an all-time record.

To match that result this year, a period when IT environment is not exactly booming, is quite a commendable achievement, I think.


The one thing about this DH2017 result on which I will express a firm opinion is the paltry interim dividend, namely 1.6cps (reflecting a 91% payout), which is less than half of the dividend declared in respect of DH2016.

This is most unsatisfactory, I think, in the context of:

1. the company's pristine financial health,
2. the clear visibility that management has into the current half's earnings (specifically the fact that the company is tracking ahead of expectations one month into the half),
3. the surplus franking credits (more than 12cps worth @30 June 2017), and
4. the significant level of retained earnings (17.7cps worth @ 31 December 2017)

They should have declared an interim dividend of at least 1.8cps (equivalent to 100% payout ratio).

I can see no need whatsoever for the board to have acted so parsimoniously in regards to the dividend and, as an engaged and considered shareholder, I will be registering my displeasure to the company in writing.



Hope this helps,

Regards,

"Old Boy"